MENA can better achieve its growth potential with greater inclusion of women in the economy

The third in a series of reports highlighting the development challenges facing the MENA region today, the report is being launched on the eve of the World Bank and International Monetary Fund's Annual Meetings in Dubai—the first such meeting to take place in MENA. This year's meetings is expected to draw some 16,000 delegates from 184 member countries to discuss the state of the global economy and address pressing development challenges confronting the developing world.

The report Gender and Development in the Middle East and North Africa: Women in the Public Sphere identifies the economic and social obstacles that women in the MENA region face in seeking employment. The report analyzes the potential economic benefits of engaging women in the work force, and suggests a plan of action that would help pave the way for expanding their role in the economy and public life.

"No country can raise the standard of living and improve the well-being of its people without the participation of half its population," emphasizes Christiaan Poortman, World Bank Vice President for the Middle East and North Africa. "Experience in other countries have shown over and over again that women are important actors in development—to hold them back is to hold back the potential for economic growth."

Gains in Women's Health, Education Not Matched by Gains in Employment
Over the last few decades, most MENA countries have dramatically improved the status of women, as a result of generous public spending on health and education. In the year 2000 average spending on education reached 5.3 percent of GDP—the highest in the world—and 2.9 percent on healthcare.

Investing in women's health and education have yielded remarkable results in a short period of time. The average literacy rate for women in the region rose from 16.6 percent in 1970 to 52.5 percent in 2000. And by the year 2000, nine girls for every ten boys were enrolled in primary schools across the region, while 74 percent of girls and 77 percent of boys were enrolled in secondary school. Today, MENA countries are well on their way to meeting one of the Millennium Development Goals adopted by the international community which calls for bridging the gender gap in primary and secondary enrollment by 2005.

Women in MENA countries are also living longer and healthier lives. Their life expectancy increased by ten years since 1980, largely due to better healthcare and a fall in maternal mortality. Expansion in women's education also contributed to the dramatic decline in fertility rates from 6.2 in 1980 to 3.3 in 2000.

Yet gains in women's health and education, with as much as 63 percent of university students being female in some countries, have not translated into commensurate gains in employment. While the rate of participation of women in the labor force in MENA has increased rapidly during the last three decades from less than 23 percent in 1970 to 32 percent in 2000, it still ranks among the lowest in the world.

"There is a distinct gender paradox in MENA," says Mustapha Nabli, the World Bank's Chief Economist for the Middle East and North Africa. "By investing in women's education, MENA countries have increased aspirations and ability to earn incomes; but the low levels of female participation in the labor force means the region is not reaping the returns of this investment."

Low Participation of Women in Economy Bears High Costs for Families and Societies
The report argues that MENA countries will have to draw on their best talents as they embrace a new model of development that relies less on oil revenues and public sector-driven growth, and more on exports and private investment that depend on a dynamic pool of skilled labor. With labor force participation largely characterized by gender inequality, women remain a largely untapped resource in the region, thus preventing economies in MENA from drawing on their best talents.

The cost of low female labor force participation reverberates in the households as well. World Bank analysis reveals that if the female labor force participation rate increased in accordance with education levels and age structure, household earnings could rise by as much as twenty-five percent.

"For many families, this is a ticket to the middle class, says Nadereh Chamlou, Senior Advisor and principal author of the report. "This demonstrates the instrumental role that women play in lifting their families out of poverty and influencing the larger socio-economic climate.'

The report suggests that as countries progress to higher levels of per capita income, increased female labor force participation results in significantly faster growth in incomes. Calculations for a subset of MENA countries show that if female participation rates reached their potential, per capita GDP growth could have been 0.7 percent higher on average than the mere 1.9 percent during the last decade for these countries.

"The well-being of the population is gauged by how much each person earns and the proportion that is working," says Nabli. "In MENA, each employed person supports more than two nonworking dependents—a burden that is double that of works in East Asia. High unemployment, high proportions of people too young or old to work and low female participation in the labor force make the region's economic dependency ratio the highest in the world."

Fears that increased participation of women in the labor force would be at the expense of employment for men are unfounded
The reports dispels a commonly held belief that in situations of unemployment women would take away jobs form men. International evidence shows that higher labor force participation of women in the labor force is not associated with increased unemployment for men, and that more often the contrary is the case. Women's work is also not a perfect substitute for that of men. While higher unemployment for females may discourage them in the short to medium run from entering the labor market; in the long run a healthy economy which is more inclusive of women is likely to enjoy lower unemployment for all.

"The size of total employment in an economy is not a fixed pie which has to be shared among groups," adds Mustapha Nabli, "it is the result of policies and institutions which, when appropriate, can create work opportunities for both men and women."

Myriad of Factors Hold Back Women From Labor Force
The report points to a combination of factors—economic, social and political—that have influenced the make-up of MENA's labor force today. Factors that suppress demand, stemming from weak economic and employment growth in the 1990s, prevented the absorption of large increases in labor supply.

In the region, women tended to work in the public sector which offered generous benefits and equal treatment to men in hiring and wages. Those who worked in the private sector faced significant disadvantages, often working in jobs with low wages and little potential for growth. Public service professions such as nursing and teaching were also perceived to be appropriate for women. But with the share of public sector employment shrinking in many countries, the report cautions that the public sector can no longer be an important source of jobs for women in the future.

The report notes that labor market regulations and social norms in MENA have also prevented women from entering the work force. Household relationships are based on the traditional view that recognizes men as the sole breadwinner of the family and women as homemaker and mother. These gender roles affect the decision making process in the household, restricting women's role in public life and increasing their dependence on men for support.

Labor regulations and family laws in most MENA countries reinforce this traditional family model, making women financially, legally and socially dependent on men. For example, tax- and employment-related benefits, such as insurance and pensions, are channeled to families only through men. Women can only receive these if they are officially the head of the household, such as widows, or if the husband is old or incapacitated. A range of sex-specific regulations, including restrictions on type and hours of work and requirements for the husband's permission to travel and work make women less flexible as workers. Family laws that grant men unilateral right of divorce and a wife's legal obligation to obey her husband could create additional barriers to women's entry in the labor force.

"The economic and noneconomic factors that affect both the ability of women to enter the labor and the demand for women workers no longer match the economic realities of the region," says Chamlou. "Few families are wealthy enough to live on one income. Women need greater flexibility to play multiple roles—as mothers, wives, workers and citizens—to maximize family welfare. Gender equality is not for the sake of women only, it is for the sake of families."

Policy Change Must Engage Society and Involve More Women
Rapid population growth in MENA is creating a generation of young men and women who are raised in smaller, nuclear families and tend to be better educated than their parents—which raises their expectations and aspirations. In terms of capability, women are increasingly on par with the men of their generation. These women and men are likely to adapt their views of their respective roles in the family and seek equality in the private and public spheres, in order to cope with the changing economic reality.

The report urges policymakers to pursue an agenda that will promote efficiency and equity and offer women greater access to opportunity and economic security. This gender agenda consists of four broad policy areas including the review of the legislative environment to ensure that women benefit from equal rights granted under the constitution; a supportive infrastructure such as better child care, transport, water and telecommunications to facilitate women's participation in the public sphere; continued attention to education, particularly to provide women with relevant market skills; and reform of labor laws and regulations to reflect the region's new development model and need for job creation in the private sector.

The report underscores the central role of the family in the cultural and social norms of MENA countries. It recognizes that the needs of the family change over time and vary across social classes, and calls for a supportive environment will allow women to play their work and family role more effectively.

Linking gender equality with good governance, the report also advocates adopting two pillars of good governance—greater inclusiveness of women in decision making, and greater accountability of institutions to ensure fairness and equality. Greater participation of women in the political process will be key to achieving change.

"Changes cannot be simply decreed. They will need to be led from the top and supported by grassroots to build consensus and political will for reforms," explains Poortman. "Partnership and dialogue with local opinion leaders and authorities, such as religious authority and civil society groups, will strengthen the legitimacy and popularity of a new policy proposal."